UPDATE 1-Uzbekistan to seek World Bank loan of up to $1 billion - source

Reuters Staff

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ALMATY, Sept 29 (Reuters) - Uzbekistan plans to seek a World Bank budget-support loan of up to $1 billion, a source close to the government told Reuters on Friday.

The plan ordering the cabinet to start preliminary negotiations by Nov. 1 was outlined in a decree by President Shavkat Mirziyoyev this week, the source said. The decree has been published officially, but without details.

The move follows Mirziyoyev’s meeting with World Bank President Jim Yong Kim on Sept.20 when the Uzbek leader attended the United Nations General Assembly session in New York.

Uzbekistan’s Finance Ministry could not be reached for comments on Friday. The World Bank office in Tashkent had no immediate comment.

According to the source, the planned borrowing would aim to soften the impact of the foreign exchange reform on the economy and the budget.

The former Soviet republic this month lifted most of the restrictions on foreign exchange - which had existed for decades - by allowing companies and citizens to freely trade foreign currency and sharply devaluing the official exchange rate . (Reporting by Olzhas Auyezov; Editing by Jack Stubbs/Jeremy Gaunt)